Monday, May 28, 2012

The vast areas of arable land that is not cultivated in Sri Lanka

I would like to point out that in my travels in the Gampaha district lately, I see huge swathes of land that remain uncultivated. They are mainly the paddy lands which we see all around us. This is simply a shame. The government as usual tries to make rules for people to follow, not make the foundation for a solution. So what they do is say they will take over uncultivated lands, unless the owner cultivates it. By making such rash and unsound statements, they are laying themselves open to ridicule.

It is simply not practical to farm these lands in small units. In order to achieve a profit the whole field, some with over 50 owners must be cultivated as one, and the renter can pay the owners of the land, an amount based on that person’s allotment size. The problem is one person’s opinion of what is a reasonable rent may differ from anothers, so there may be some form of set rate, and as all the owners have to participate, as otherwise the tenant farmer will not take up the opportunity, it is not an easy one to solve, but is doable.

It is this out of the box approach that is now needed for cultivation, as we are only realizing a minuscule amount of productivity from our lands due to the small intensive agriculture we have practiced for generations, which does not make economic sense today.

On the legal side, what they need to do is to reinforce the ownership of the land, so the owner does not lose his rights if someone else rents that land for any purpose, even to graze their cattle. If one just takes the latter as an example, if I am able to rent a large paddy field for a period of three years to grow grass, and then use this new variety of grass that is high in nutrients for the cows, I may be able to run a profitable dairy business.

If I can do this in the Gamapa district close to the areas of consumption of milk, it will serve many purposes. It will help us become self sufficient in Milk production for domestic use. It will also help us utilize unutilized land for a constructive purpose without using it as fallow. A mix use of growing grass can turn the soil fertility round and be a good intermediate crop before the owners retake the land once the leases expire and grow their agribusiness after taking learning from the current tenant of the self same land.

Most agricultural advisers see this anomaly, and have suggested that they get involved in the projects currently in existence. It is very important that we understand, that the land lies fallow because the owner is otherwise engaged in a career however the interpretation of the law precludes him from renting out the land either, due to the fear that it could be taken over.

In conclusion, we must enact legislation without delay to preserve the ownership rights of property and permit renting out of land for a fair rate that provides the high risk farmer a certain level of knowledge that he can farm the land for the term of the lease without any encumbrances other than simply making the annual payment in advance. In this system all stakeholders will be empowered to make a difference by using their land wisely to maximize the productivity and benefit the nation.  

I believe too few people understand the potential of this land, because we are still stuck in the 18th century as far as agricultural practices are concerned and must take a few leaps of centuries to get to the current date and implement practices adopted now. What is worse a lot of emphasis is on going back to past to copy from what was done then.

Once must learn from the past so the same mistakes are not made by a new generation and adopt the relevant practices for the present.

The whole of the Gampaha district is becoming a place littered with single family dwellings on one level, some with large plots others with just enough room for a home, and many in between. Of course the in between ones appear to use the land area for growing food to feed the family, whilst the larger plots are generally under utilized as it requires a large labor input if it were to be cultivated intensely. They nevertheless have an assortment of trees that produce different fruit depending on the seasons for personal consumption, surrounded by the fields I referred to which are not economical for the owners to attempt to cultivate and which they dare not give to another farmer to work on for fear of not being able to recover the land.

So I believe the law must be clear, and one should not have to go to court to retrieve the land once the lease expires and must automatically revert to the owner unless there is a new lease agreement from scratch as a new rental that is agreeable to both parties.

Sunday, May 27, 2012

The guaranteed price – Is it a win win situation for both parties?

In my blog entry yesterday I reported on how once farmers were given a guaranteed price for their produce, in this case corn of Rs35/kg they were able to produce a bumper crop, which for the first time made Sri Lanka a net exporter of corn. If this is a real life example then we must adopt it for other crops, especially if we can guarantee export at a quality and price the importer in the foreign country wants.

It is worth remembering that if the price in the local marketplace was higher than Rs35/kg, I wonder if our farmers would stick to the agreement or try and sell their produce elsewhere! Either way, it is a start and has proven to work and the farmer who grew this crop definitely wins hands down over the farmers who planted paddy.

It is also worth remembering that the fertilizer subsidy extends to all crops now and so the urea used by the corn farmers now costs Rs1000 a 50kg bag as opposed to the Rs4000 which is the world market price at which the government buys it to sell to these farmers. I would dearly like to know what the average use of urea was per 1000kg of corn. If it was two bags then this extra cost of Rs6000 must be added to costs to determine if the nation as a whole benefits as the 35,000 per effectively incurs an export levy of Rs6000 a tone. As today’s spot price in NY is Rs 33,000 for corn, then one wonders how beneficial it really is! We are effectively giving the exporter a subsidy of that amount. The flip side of this is would the farmer have grown this product if he had to pay full price for the Urea, an essential component input in the growth of corn as a little is put into each planting hole at planting to maximize weight and plant growth?

So, on the same vein if paddy farmers are guaranteed Rs35/kg for a quality paddy that will be used for export, then we again must take into consideration the fertilizer subsidy when counting the cost of export. In this case the per ton subsidy is greater as the fertilizer subsidy for rice is much greater as the same bag is sold for Rs350 to the paddy farmer and not Rs1000 as sold to the corn farmer.

When the Rs50B subsidy for fertilizer per annum is accounted for I wonder whether our calculations of the success are true!! It is something for the policy planners to think about when making rash statements of the success of this type of export. What if this subsidy is removed? Will the net benefit to the economy be plus? Only good paddy land will be cultivated and the surplus will not arise, and possibly give rise to shortages and price rises. Another interesting possibility for consideration. I really wonder if this sort of analysis is undertaken by the planners in making important decisions that affect the lives of ordinary people.

Saturday, May 26, 2012

Exporting Corn to Taiwan and Canada! The sweet smell of success

I must confess that I am pleasantly and unbelievably surprised that after many years of Sri Lanka being a net importer or corn, we are now a net exporter of this product for the first time. If the government statistics are to be believed, our annual consumption of corn is 180,000 tonnes and this year due to a harvest of 200,000 tonnes we have a surplus of 20,000 tonnes for export. That is an extremely creditable achievement which we hope can be built upon, firt for corn and then for other products. I Understand that Wyamba Traders have entered into forward purchasing agreements with up to 2200 farmers in Anuradhapura District at Rs35 a kg for the maize/corn  which takes 75 days from planting seeds to harvest and this has helped the farmers earn a reasonable return as compared with paddy cultivation.

I have grown corn myself and know if it is grown in large quantities one can use many labor saving tools to harvest and separate the corn from the cob, which is obviously the reason for this success. Most of the corn we produce goes for animal feed, and in the past we imported this to make the animal feed. There is no doubt that we have used high yielding varieties of seeds bought at high cost, from international suppliers who amy also have used GM seeds, though our seed control people are blissfully unaware that we are unable to market GM produce in the Island!!

Nevertheless credit must be given to the farmers for producing corn in abundance so that we have sufficient for export too. I hope we do not see a day when we import this commodity if we have ideal soil and growing conditions to grow it at a cost that is lower enough where we can compete in the world market with other suppliers. I am at a loss to know why we are sending corn to Canada, surely a very high producer of the item! I guess there is a reason for that.

On a related issue I am currently not in the loop on the price of corn in the market. All I know is that egg producers are losing money hand over fist with the drop in egg prices to Rs6 wholesale which would be the price the producers receive no matter what we pay at the store! If the feed cost including corn is so high, I do not know how they can sustain purchasing this product, and if they cull their flocks due to the losses, then the demand for corn would drop further.

This success in our agricultural products could be a fore runner of more marginal land going from paddy cultivation to growing corn as the latter does not require that much water and in the Yala season a perfect intercrop to complement paddy, and once harvested the spent trees can be ploughed back into the soil to improve the humus content of the soil as well the natural nitrogen content. I have fed the newly harvested plants to my cows as animal feed also so I am sure with some ingenuity many uses can be found to enrich the soil of paddy fields with this crop.